impact of starting a new venture

THE IMPACT OF STARTING A NEW VENTURE ON THE ENTREPRENEUR AND THEIR FAMILY: EXPECTATIONS, REALITY, AND WILLINGNESS TO START AGAIN Chyi-lyi (Kathleen) Liang, University of Vermont Paul Dunn, The University of Louisiana at Monroe ABSTRACT This paper reports the results of a national study of retail and service firms designed to determine the impact of entrepreneurial behavior of starting a business on the entrepreneur, their spouse, and their children. The results show that there is a substantial negative impact on these groups and that the experience results in learning. INTRODUCTION The purpose of the current paper is to expose the result of a study done during 1999 of entrepreneurs, their expectations, and the reality of the results of starting a new venture and the impact on the entrepreneurs and their families. The results, while not definitive, provide some insight into the results of starting a new venture, the impact of starting on the entrepreneur and their families, and whether or not starting has resulted in any change in perceptions of entrepreneurs regarding the impact of starting a new venture. The characteristics and motivation of entrepreneurs may lead them to start enterprises that they think will make them and their families better off. In some cases, those behaviors could result in unanticipated negative outcomes including failure and the consequent loss of family income, resources, and interpersonal relations. Difficulties in the process of starting and managing a new venture and/or the failure of that venture will result in learning on the part of the entrepreneur. While much of the observed and formal research on these difficulties, including failure, emphasizes that entrepreneurs learn and can start new ventures in a more orderly fashion, it is possible that some decide that entrepreneurship is not for them and decide not to start another venture. This research explores impact of starting new ventures on entrepreneurs and their families from the perspective of the entrepreneur, their expectations and reality, and on whether or not they would start another new venture. METHODOLOGY AND SAMPLE A sequential probability sample of 1036 retailer and service firms with fewer than 50 employees that had been in the database less than five years was drawn from the American Business Disc, Second Edition, 1999. A mailed questionnaire was developed, pre tested, and revised to collect the information needed for the study. The survey was designed for business owners only, and one business owner in each business or each household answered the questions. The answers reflect the owner's personal view regarding his/her personal perspectives for spouse and children. None of the spouses or children answered the questions directly. Of the 1036 questionnaires mailed, 158 were returned as undeliverable. One hundred six were returned from the first mailing. A follow up mailing and telephone campaign resulted in 29 additional responses. These additional responses were not different from the original returned questionnaires. There were 135 completed questionnaires, a 15 percent response rate. Of the 135 completed questionnaires, 132 responded to the question regarding their willingness to start again. These were used in this and report of findings. The sample. Responses were from 28 states coastto-coast and border-to-border. Rural entrepreneurs, outside communities of 50,000 or more people, accounted for 38.5 percent of the responses. Twenty percent of the respondents were from the western, 24.6 percent were from the central, and 55 percent were from the eastern United States. Women entrepreneurs accounted for 38.5 percent of the responses. Sole proprietors accounted for 52.3 percent; partnerships, 7.7 percent; incorporations, 35.4 percent; and the remainder, LLC, 1.5 percent, other, 1.5 percent, and no responses, 1.5 percent respectively. Only retail and service firms were surveyed. Flowers, gifts, and related business accounted for 29.2 percent, eating and drinking places were 23.1 percent, automotive related were 15.4 percent, apparel and accessories were 12.3 percent, services were 10.8 percent, and other were 9.2 percent. Of this sample, 70.8 percent of the entrepreneurs had started their business within the last ten years. Annual sales for 72.3 percent of the respondent businesses were less than $500,000. Seventy-five percent had less than 5 fulltime employees and 76.9 percent had less than 5 part time employees. Most of the entrepreneurs were under fifty, 70.8 percent, and 60 percent of those married had spouses 50 or younger. The age of the oldest and youngest child, among respondents with children, was reported to be 20 years or younger by 66.1 percent and 60 percent respectively. Eighty percent were currently married (including separated) at the time of the survey, 6.2 were divorced, and 10.8 were not married. Among married respondents, 30.2 percent had spouses who worked fulltime in the business, 37.7 percent had spouses who worked part time, in the business, and 28.3 percent had spouses who did not work in the business. Many, 40 percent, had spouses who worked outside the business. Among respondents with children, 7.3 percent had children working fulltime in the business, 40.0 percent had children working part time in the business, and 47.3 percent did not have children working in the business. Sources of funds used in starting the business included personal savings, 42.5 percent; family savings, 13.8 percent; loans, 22.5 percent; gifts, 13.8 percent, and other 7.5 percent. Significantly, over 50 percent used personal or family savings. REVIEW OF THE LITERATURE Entrepreneurs start new ventures based on their assessment of the situation. While spouses are sometimes consulted, their assessment of the venture potential for themselves and their children is often based on their feelings toward the entrepreneur. As a result, entrepreneurs and their families expose themselves to a future that is often uncertain. The authors have found very little qualitative or quantitative research related to expectations, reality and the willingness to start a new venture. The current analysis is designed to extend a previous descriptive report and analyze the data and provide some insight into these issues. Characteristics and motivation of entrepreneurs. Many entrepreneurship and small business management textbook authors discuss the characteristics and motivation of entrepreneurs. The discussions of characteristics typically mention high achievement drive, action oriented, internal locus of control, tolerance for ambiguity' moderate risk taking, commitment, optimism, opportunistic, initiative, independence, commitment/tenacity or some form of one or more of these. (Stevenson, Grousbeck, Roberts, Bhide, 1999; Longenecker, Moore, and Petty, 1999; Scarborough and Zimmerer, 1999; Bhide, 2000; Bygrave, 1994; Kuratko and Hodgetts, 1998; Vesper, 1996; Hodgetts and Kuratko, 1995; and Timmons, 1999; Jennings, 1994; Lambing and Kuehl, 1997) The discussions of motivation usually revolve around the opportunity to gain control over their lives/independence, to get profits/financial rewards, to enjoy what they are doing, to achieve their personal goals and recognition, to make a difference/contribute to society. (Stevenson, Grousbeck, Roberts, Bhide, 1999; Longenecker, Moore, and Petty, 1999; Scarborough and Zimmerer, 1999; Bhide, 2000; Bygrave, 1994; Kuratko and Hodgetts, 1998; Vesper, 1996; Hodgetts and Kuratko, 1995; and Timmons, 1999) Periodic literature contains similar lists of characteristics and motivations. The entrepreneur, their family and new venture creation. Many of these same writers discuss the downside of entrepreneurial behaviors including: uncertainty of short term income and longer term financial rewards, risk of losing their business and personal assets, long hours and hard work, low quality lifestyle until the business gets established, high stress, and complete responsibility. A review of texts and periodical literature by the authors for a previous article (Dunn and Liang, 2001) revealed that many authors discuss the impact of starting on the entrepreneur and, in particular their family, in a fairly limited fashion. Only a few discuss the downside of entrepreneurial behaviors from the family perspective. Some discuss family implications before starting, other the process of starting, and still others, the results of starting s new venture. "Family responsibilities play an important role in the decision whether to start a company. It is a much harder decision when a person is 45 and married, has teenage children preparing to go to college, a hefty mortgage, car payments, and a secure, well-paying job." (Bygrave, 1994) Family members make minor sacrifices for the good of the business including long hours taken by the business. "Occasionally, however, the clash between business interests and family interests is so persistent or so severe that entrepreneurs must decide which comes first." (Longenecker, Moore, Petty, 1999) The uncertainty of income, risk of losing entire invested capital, long hours and hard work, lower quality until the business gets established (entrepreneur's family roles suffer), high stress, and complete responsibility. (Scarborough and Zimmerer, 1999) "Starting a new venture uses much of the entrepreneur's energy and time. ...Entrepreneurs who are married, and especially those with children, expose their families to the risks of an incomplete family experience and the possibility of permanent emotional scars." These authors indicate that the greatest risk "may be to the well-being of the entrepreneur," (Hodgetts and Kuratko, 1998) Learning from experience. Many of the texts reviewed discussed the fact that entrepreneurs learn from experience and from failure. (Bhide, 2000; Scarborough and Zimmerer, 1999; Kuratko and Hodgetts, 1998; Hodgetts and Kuratko, 1995; Lambing and Kuehl, 1997; Timinons, 1999) The review of periodic literature reveals similar discussions about learning from failure. (Shefsky, 1994; Mamis, 1989; King, 1988; King, 1997; Kleiner and Roth, 2000; Clancy, 1999; Covey and Pollockvey, 2000; Pivcevic, 1995; Sellers, 1997; Kleiner and Roth, 2000; Richard Monk, 2000) Only one article was found that discussed expectations. The authors concluded that entrepreneurs had a high degree of optimism and probably overestimated their chances of success and expected rate of return. In addition, they concluded that financial incentives were ranked fourth in motivation. Employment, need for independence, family and community welfare, all ranked above "instrumentality of wealth. (Pinfold, 2001) The literature review revealed that there is considerable agreement regarding the characteristics and motivation of entrepreneurs. Based on the review, there was very little research on the impact of new venture creation on entrepreneurs and their families. The review further indicates that many feel that entrepreneurs learn from experience including failure. These discussions were typically in the form of assertions supported by anecdotal information on entrepreneurs who were successful after starting again. There was no apparent research on this topic and none that the authors could discover regarding those who failed and did not start again or were not successful in subsequent new ventures. There is very little in the literature regarding entrepreneurs' expectations for themselves and their families from a new venture. CIRCUMSTANTIAL VARIABLES AND READINESS TO START AGAIN The circumstances surrounding new venture creation consider when the business was started, the type of business started, the region of the country, the rural or urban setting, the age, and the sex of the entrepreneur. Table 1. Percentage of Entrepreneur's Choice to Start the Business by Years of the Business Experience PPvalue value Would Chifor Would Years in Business 5 years Start 46.53 Not Square Gamm a Start Test Test 50.00 0.46 34.38 6.25 9.38 32 0.34 6-10 years 24.75 11-15 years 9.90 > 15 years 18.81 Total Total responses 101 100.00 100.00 Among entrepreneurs who started less than five years ago, 46.5 percent would start again, but 50 percent would not start again. There was no significant difference between the groups related to the length of time the firms had been in business. Table 2. Percentage of Entrepreneur's Choice to Start the Business by Business Types Type Business Eating and Drinking Automotive Apparel and Accessories Flowers, Gifts and Related Services Others Total Total responses Would Start 19.80 9.90 13.86 18.81 12.87 24.75 100.00 101 P-value P-value Would for ChiFor Not Square Gamma Start Test Test 0.54 25.00 6.25 21.88 15.63 18.75 12.50 100.00 32 0.29 Table 4. Percentage of Entrepreneur's Choice to Start the Business by Region P- P-value value Would for for ChiWould Not Square Gamma Start Start Test Test 17.82 15.63 0.94 0.94 28.71 31.25 53.47 53.13 100.00 100.00 101 32 Region West Central East Total Total responses With regard to the types of businesses started, there was no significant difference between those who would not start and those who would start. Table 3. Percentage of Entrepreneur's Choice to Start the Business by Business Location P-Value P-value Would for ChiWould Rural or Urban Rural Urban Total Total responses Start 48.51 51.49 100.00 101 Not Square Start 62.50 37.50 100.00 32 Test 0.17 for Gamma Test 0.16 There were almost equal proportions of individuals who would and would not start again by region. There was no significant difference between those who would start and would not start related to region. Table 5. Percentage of Entrepreneur's Choice to Start the Business by Age Pvalue for ChiSquar e Test 0.85 16.13 48.39 35.48 100.0 0 31 Pvalue for Gamm a Test 0.56 Would Age of Would the Entrepren Start eur Under 40 years old 20.00 40-50 49.00 years old Over 50 31.00 Total 100.00 Total responses 100 Not Start Among rural and urban entrepreneurs, there was no significant difference between those who would start and those who would not start. A larger portion of rural entrepreneurs, 62.5 percent would not start compared to 48.5 percent of urban entrepreneurs who would not start. Similarly, there was no significant difference between those who would start and would not start related to the age of the entrepreneur. Table 6. Percentage of Entrepreneur's Choice to Start the Business by Gender PPvalue value Would for for ChiWould Not Squar Gamm e a Start Start Test Test 39.60 53.13 0.18 0.18 60.40 46.88 100.00 100.00 101 32 Gender Female Male Total Total responses The sex of the entrepreneur also seems not to be a factor. There was no significant difference between entrepreneurs who would start and those who would not start. Table 7. Percentage of Entrepreneur's Choice to Start the Business by Annual Sales P-value P-value Would for for ChiWould Not Square Gamma Start Start Test Test 0.32 Actual sales for entrepreneurs who would not start again showed 65.63 percent with sales less than $500,000 and 34.38 percent with sales of $500,000 or more. The circumstances surrounding entrepreneurial start up (the business was started, the type of business started, the region of the country, the rural or urban setting, the age, and the sex of entrepreneurs) did not seem to make a difference. There was no significant difference between those who would start up and those who would not start up related to these circumstantial variables. Evidently the differences related to the circumstantial variable did not make a difference about the attitude of the entrepreneur regarding starting again. On the other hand, there were differences related to expectations, reality, and willingness to start again. These findings are discussed in the next section. EXPECTATIONS, REALITY, AND WILLINGNESS TO START AGAIN Entrepreneurs' expectations, reality, and willingness to start again include whether the business was up and running well, sales, profits, difficulty of starting, length of time required to start and the impact on entrepreneurs and their families. These variables are discussed in this section. Ninety-two percent of entrepreneurs who would start again agreed that their business was up and running well, while 68.75 percent who would not start again agreed that their business was up and running well. Eight percent and 31.25 percent of those who would start and would not start again disagreed with this assertion respectively. Evidently, a substantial proportion of the entrepreneurs who would start again had positive results regarding their expectations while those who would not start again had a negative experience. Annual Sales Less than 75.00 65.63 0.30 $500,000 $500,000+ 25.00 34.38 Total 100.00 100.00 Total 100 32 responses Seventy-five percent of the entrepreneurs who would start again had actual sales less than $500,000 and 25.0 percent had sales of $500,000 or more. Sixty-four percent of the entrepreneurs who would start again indicated that their sales were higher than expected, while 46.88 percent of those who would not start again agreed with this assertion. Thirty-six percent of the entrepreneurs who would start again disagreed that sales were higher than expected and 53.13 percent of those who would not start again disagreed with that assertion. Individuals who would start again had a more positive result compared to their expectations. Those who would not start again did not have as positive results compared to their expectations related to sales. Forty-four percent of the entrepreneurs who would start again agreed that profits were higher than expected and 15.63 percent of those who would not start again agreed that profits were higher than expected. Entrepreneurs who disagreed that profits were not higher than expected were much less likely to start again. Fifty-six percent of entrepreneurs who would start again disagreed that profits were higher than expected and 84.38 percent of those who would not start again disagreed. Entrepreneurs who would start again felt their profit expectations were met while many entrepreneurs who would not start again had profits that did not match expectations. Sixty-four percent of the entrepreneurs who would start again agreed that starting was harder than expected. Eighty-four percent of those who would not start again agreed that starting had been harder than expected. Among entrepreneurs who would start again, a majority felt that their expectations regarding the difficulty of starting were not met, while a substantially larger proportion of those who would not start again felt that starting took longer than expected. Clearly both groups had underestimated the difficulty of starting. Sixty-two percent of those who would start again agreed that starting had taken longer than expected. Among entrepreneurs who would not start again, 67.74 percent agreed that starting had taken longer than expected. Thirty-eight percent of the entrepreneurs who would start disagreed that starting had taken longer than expected and among those who would not start again 32.26 percent disagreed that starting took longer than expected. The reality for most entrepreneurs, both those who would start again and those who would not start again, was that starting had taken longer than expected. Underestimating the length of time required to start the business was a problem for both groups. Sixty-two percent of the entrepreneurs who would start their business again disagreed that their expectations were too optimistic. Thirty-eight percent, however, agreed with the assertion. The majority of entrepreneurs who would not start their business again agreed that their expectations were too optimistic (65.63 percent) and only 34.38 percent disagreed with the assertion. This result suggests that those who would not start again now realize that their expectations were too optimistic. This optimism is often cited in the literature. Entrepreneurs who would start again and who would not start again agreed that their income was good before starting (73.74 percent and 87.5 percent respectively). Interestingly, a larger proportion of those who would not start felt they had good incomes before they started. This may indicate that income expectations were higher than realization for both groups, but had a bigger impact on those who would not start again. There was no significant difference between entrepreneurs' assessment of their spouse's enthusiasm before starting with 76.19 percent of those who would start again and 80.0 percent of those who would not start again who thought their spouses were happy before starting. Spouses are often important partners in new ventures and share the entrepreneur's vision. Both groups felt that their spouses were enthusiastic before they started. A similar result regarding their children's enthusiasm existed, 70.31 percent of those who would start again and 69.57 percent of those who would not start again thought that their children were enthusiastic before starting. Perhaps their optimism outweighed their feelings regarding their spouse and children's enthusiasm. Expectations about more personal happiness for those who would start again and those who would not start again was 71.71 percent and 80.65 percent respectively. A substantial majority of the entrepreneurs responding expected to be happier. Interestingly, 28.28 percent and 19.35 percent of each group respectively did not expect to be happier. One wonders why they started the venture. Entrepreneurs who would start again generally had their expectations realized, 87.0 percent were happier and 13.0 percent were not happier. For those who would not start again, expectations of being happier were achieved by only 18.75 percent. Over 80 percent of this group was not happier. Clearly, expectations for this latter group were not realized. The reality of personal happiness was quite different for those who would start again and those who would not. Among entrepreneurs who would start again, 67.42 percent expected their families to be happier. Entrepreneurs who would not start again expected their families to be happier 73.33 percent of the time. When almost 30 percent of both groups did not expect their families to be happier, family concerns were not considered or were over ridden by other considerations. It is interesting that those who would start again had lower expectations regarding their family's happiness compared to those who would not start again. P-value for Gamma Test 0.01* 0.09* 0.00* 0.02* 0.55 0.01* Table 8. Percentage of Entrepreneur's Choice to Start the Business by Personal Perspectives Would Would Not Start P-value for Start ChiAgain Again Square Test Business is up and running well (n=132) Agree 92.00 68.75 Disagree 8.00 31.25 0.00* Sales are higher than expected (n=132) Agree 64.00 46.88 Disagree 36.00 53.13 0.09* Profits are higher than expected (n=132) Agree 44.00 15.63 Disagree 56.00 84.38 0.00* Starting the business is harder than expected (n=133) Agree 64.36 84.38 Disagree 35.64 15.63 0.03* Starting the business took longer than expected (n= 131) 13 1) Agree 62.00 67.74 Disagree 38.00 32.26 0.56 My expectation was too optimistic (n=132) Agree 38.00 65.63 Disagree 62.00 34.38 0.01* My income was good before starting the business (n= 131) 13 1) Agree 73.74 87.50 Disagree 26.26 12.50 0.11 My spouse was enthusiastic before starting the business (n= 114) 114) Agree 76.19 80.00 0.07* Disagree My children were enthusiastic before starting the business (n=87) I expected that I would be happier (n=130) I am happier after starting the business (n=132) I expected that my family would be happier after starting the business (n=119) 19) My spouse is happier after starting the business (n=113) 13) My children are happier after starting the business (n=101) I expected to be better off financially before starting the business (n=129) I am better off financially after starting the business (n=128) My family expected to be better off financially before starting the business (n=119) 19) My spouse thinks that we are better off financially after starting the business (n=108) Children think that we are better off financially after starting the business (n=88) After starting the business, I don't have time for myself as before (n=133) After starting the business, I am not able to spend time with my spouse (n=115) 15) After starting the business, I am not able to spend time with my children (n=105) After starting the business, my relationship with my spouse is strained (n=115) 15) After starting the business, my relationship with my children is strained (n=107) 107) Agree Disagree Agree Disagree Agree Disagree Agree Disagree Agree Disagree Agree Disagree Agree Disagree Agree Disagree Agree Disagree Agree Disagree 23.81 70.31 29.69 71.72 28.28 87.00 13.00 67.42 32.58 59.04 40.96 71.43 28.57 78.35 21.65 57.29 42.71 77.27 22.73 59.49 40.51 20.00 69.57 30.43 80.65 19.35 18.75 81.25 73.33 26.67 13.33 86.67 16.67 83.33 84.38 15.63 28.13 71.88 80.65 19.35 24.14 75.86 0.67 0.66 0.95 0.32 0.00* 0.95 0.29 0.00* 0.54 0.00* 0.00* 0.53 0.00* 0.00* 0.46 0.00* 0.43 0.00* 0.70 0.69 0.00* 0.00* Agree Disagree Agree Disagree Agree Disagree Agree Disagree Agree Disagree Agree Disagree 71.43 28.57 72.28 27.72 50.00 50.00 55.00 45.00 34.52 65.48 18.29 81.71 32.00 68.00 87.50 12.50 80.65 19.35 72.00 28.00 61.29 38.71 32.00 68.00 0.00* 0.00* 0.08* 0.04* 0.00* 0.00* 0.13 0.11 0.01* 0.01* 0.14 0.19 Starting the business has no effect on my marriage (n=111) 11) If I were to start the business again, my family would support me (n=123) Agree Disagree Agree Disagree 49.38 50.62 90.22 9.78 26.67 73.33 22.58 77.42 0.03* 0.02* 0.00* 0.00* Among entrepreneurs who would start again 59.04 percent thought their spouse was happier and 40.96 felt that their spouse was not happier. Only thirteen percent of the entrepreneurs who would not start again agreed that their spouses were happier with 86.67 percent disagreeing with the assertion. Neither groups' expectations regarding family happiness were met for their spouse, but those who would start again felt their families were happier than those who would not. There may be a difference in the impact of the level of expectations compared to reality. As with the spouse, expectations were not met regarding children's happiness. Of those who would start again, 71.43 percent felt their children were happier and 28.57 percent felt their children were not happier. Among entrepreneurs who would not start again, only 16.67 percent felt their children were happier and 83.33 percent felt their children were not happier. The latter group did not have their expectations met as it relates to their children. This failure to meet expectations, along with the others discussed, could be a reason for not wanting to start again. Expectations regarding financial rewards were that different for entrepreneurs who would start again, 78.35 percent, and those who would not start again, 84.38 percent. These statistics are very close to those found regarding good income before the venture was started. Interestingly, some entrepreneurs did not expect to be financially better off from starting the business. This may indicate that financial rewards are not as important as sometimes thought, Entrepreneurs who would start again felt that they were financially better off, 57.29 percent and 42.71 percent felt they were not financially better off. Only 28.13 percent of those who would not start again felt they were financially better off and 71.88 percent of this group felt they were not financially better off. One wonders why those who would start again would. Financial reward seems not to be extremely important to entrepreneurs. Of course, starting a business impacts the family too. There was little difference between those who would start again and those who would not start again regarding the expectation that their family would be better off, 77.27 percent and 80.65 percent respectively. Entrepreneurs could either be allowing their own optimism regarding outcomes outweigh their assessment of their family's attitudes or there may be a lower expectation regarding family financial benefit. Entrepreneurs who would start again felt that their spouse thinks the family is better off 59.49 percent versus 40.51 percent who disagreed with this assertion. Among entrepreneurs who would not start again, only 24.14 percent thought their spouses felt the family was better off and 75.86 percent thought their spouses felt the family was better off. A higher portion of entrepreneurs who would start again thought their children felt financially better off, 71.43 percent, compared to 28.57 percent who disagreed that their children felt better off. Either the children's feelings about being financially better off are different from the spouse's feelings or the entrepreneurs' assessment is not accurate. Among entrepreneurs who would not start again, only 32.0 percent thought their children felt the family was financially better off compared to 68.0 percent who disagreed with the assertion. Expectations regarding financial benefit for their families were not met for either group, but those who would not start again seemed to have been more negatively impacted. Among entrepreneurs who would start again, 72.28 percent felt they did not have time for themselves compared to 87.5 percent of those who would not start again. The latter group agreed more frequently. Thosewho would not start again seemed to feel fairly strongly that time for them was not available. Perhaps their expectations regarding the time required to manage their venture were not correct. Time available to spend with their spouse was a problem for 50.0 percent of those who would start again compared to 80.65 percent of those who would not start again. Time spent with children reflected similar results with 55.0 percent of those who would start again and 72.0 percent of those who would not start again agreeing with this assertion. Time to spend with spouse and children was more of a problem for those who would not start again than for those who would start again. This may be a reflection of their attitude toward the use of their time or their feelings about their family. The impact of starting a business on relationships with spouses was a problem for 61.29 percent of entrepreneurs who would not start again compared with 34.52 percent of those who would start again. A majority of the latter group, 65.48 percent disagreed with this assertion. Starting the new venture seems to have had a negative impact on spousal relationships. This finding may reflect an attitude toward their spouse compared to the business-those who would start again may value their business above their spouse. The author's experience is that many entrepreneurs have ambivalent feelings about the relative value of the business and their relationship with their spouse and those feelings could be reflected in this result. Evidently there was less a strain on relationships with children than with spouses. Only 18.29 percent of those who would start again and 32.0 percent of those who would not start again felt a strain on their relationship with their children. Older families with grown children may account for some difference. Entrepreneurs who would start again were about evenly split on whether or not starting the business had an effect on their marriage, 49.38 percent no effect and 50.62 percent an effect. Among entrepreneurs who would not start, 73.33 percent felt there was an effect on their marriage and 26.67 percent felt there was no effect on their marriage as a result of starting the business. The results of this question clearly indicated that the impact of starting a business on families might not be good. Entrepreneurs who would start again felt their families would support them in a new venture again, 90.22 percent, compared to only 22.58 percent of those who would not start again. Over three quarters of the latter group felt that their families would not support them in a new venture. Clearly, those who would not start felt differently about the impact on their families. SUMMARY AND CONCLUSIONS Success rates among new ventures have been estimated to be between 15 and 50 percent during the first five years after starting a business. These rates depend on the assumptions, definitions, and methods of measurement used. 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